Borrowing to reduce New York debt? Let that concept sink in for a few minutes. I hope that I am not the only person having a hard time with the notion that borrowing more money might not be the best way to reduce our state debt or solve New York’s fiscal problems. With that hope in mind, I have introduced legislation called the Truth in Borrowing Act, which would reveal the true costs associated with state borrowing.
This legislation would require any ballot proposition creating state debt to contain an estimate of the interest, the payback period, and the total cost of repayment. As it stands now, when taxpayers vote on borrowing proposals, they have no idea how much they will be forced to pay over the life of a loan. I introduced this measure in reaction to past borrowing practices, a vote this week on a bill that supports $9.29 billion in debt service, and to our lieutenant governor’s plan to borrow $6 billion more. I don’t see why government should function differently than our banking institutions.
When was the last time you went into a bank and borrowed money without first having the terms of the loan very carefully laid out for you? Before your transaction is completed, you know how much you are borrowing, how long you have to pay it back, and exactly how much it will cost you with interest. Why should the state be held to a lesser standard when asking us to support more borrowing with our tax dollars as collateral?
Does anyone remember when the state “sold” Attica State Prison to an authority in 1990? Back then, we were told that New York was borrowing $200 million for that transaction. Guess what, so far we have paid $344 million and we still owe another $222 million in principal and interest. Right or wrong, taxpayers should have had all the facts. Fiscal experts, regardless of party affiliation, will attest to the dangers associated with incurring more debt. According to state Comptroller DiNapoli, New York’s $3,089 in debt per person is more than three times the national average. The comptroller also will tell you that state-funded debt has grown by almost 25% over the past five years.
With those numbers in mind, I cannot understand how borrowing more money is a good idea. Or why the state allows any borrowing without full taxpayer disclosure. If the appetite for borrowing and spending isn’t curbed, and it should be, shouldn’t the taxpaying public at least have full knowledge and some say in how their money is being spent?